Government Gazette Staatskoerant

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1 Government Gazette Staatskoerant REPUBLIC OF SOUTH AFRICA REPUBLIEK VAN SUID-AFRIKA Vol. 595 Pretoria, 29 January Januarie 2015 No N.B. The Government Printing Works will not be held responsible for the quality of Hard Copies or Electronic Files submitted for publication purposes AIDS HELPLINE: Prevention is the cure A

2 2 No GOVERNMENT GAZETTE, 29 JANUARY 2015 IMPORTANT NOTICE The Government Printing Works will not be held responsible for faxed documents not received due to errors on the fax machine or faxes received which are unclear or incomplete. Please be advised that an OK slip, received from a fax machine, will not be accepted as proof that documents were received by the GPW for printing. If documents are faxed to the GPW it will be the sender s responsibility to phone and confirm that the documents were received in good order. Furthermore the Government Printing Works will also not be held responsible for cancellations and amendments which have not been done on original documents received from clients. No. CONTENTS INHOUD Page No. Gazette No. GOVERNMENT NOTICE The Presidency Government Notice 58 Independent Commission for the Remuneration of Public Office Bearers Act, 1997: Explanatory memorandum for Annual Remuneration Recommendations for 2014/

3 STAATSKOERANT, 29 JANUARIE 2015 No GOVERNMENT NOTICE INDEPENDENT COMMISSION FOR REMUNERATION OF PUBLIC OFFICE BEARERS No January 2015 Enquiries: Mr. PM Makapan Tel: /7 Fax: Peterm@po.gov.za The Presidency Private Bag X1000 PRETORIA 0001 INDEPENDENT COMMISSION FOR THE REMUNERATION OF PUBLIC OFFICE BEARERS EXPLANATORY MEMORANDUM FOR ANNUAL REMUNERATION RECOMMENDATIONS FOR 1. Introduction 2014 / 2015 The Independent Commission for the Remuneration of Public Office Bearers ("the Commission") is statutorily obliged by virtue of Section 8 (4) and (5) of the Independent Commission for the Remuneration of Public Office Bearers Act, 1997 ("Commission Act"), to make annual recommendations relating to the salaries, benefits, allowances, and the resources required by public office bearers to enable them to perform their respective duties effectively. On 18 December 2013 the Commission published the 2013/2014 Annual Recommendations for cost-of-living-adjustment on a sliding scale for public office bearers effective from 013' April In recommending the increase the Commission had considered applicable legislation and the following relevant factors: Section 8(6) of the Commission Act The level of the Consumer Price Index (CPI) and its forecast Market salary increases during the past year Forecasted salary increases for the year ahead The economic and social environment Past recommendations together with the President's determinations The inputs from key stakeholders in terms of the mandatory consultation requirements Other relevant factors 2. ANNUAL REMUNERATION RECOMMENDATIONS FOR 2014/2015 The Commission at its meetings of 09 May 2014 and 19 July 2014 discussed the Annual Remuneration Recommendations for 2014/2015. Subsequent to these meetings, the Commission consulted with the Minister of Finance, the Minister of Justice and Constitutional Development, the Chief Justice, and the Lower Courts Remuneration Committee (in terms of the provisions of Section 12 of the Magistrates Act No. 90 of 1993). Consultation was also extended to the Minister of Cooperative and Traditional Affairs and the Minister of Public Service and Administration. The Commission at its meeting of 26 November 2014 discussed at length the stakeholders' responses on the Commission's Annual Remuneration Recommendation for 2014/2015 as received. Commissioners: Judge CJ Musi (Chairperson); Adv M Sello (Deputy Chairperson); Mr C Economou; Adv HFN Sephoti; Ms TN Mgoduso, Dr R Nienaber; Dr LM Mbabane and Mr AL Pheto Head of Secretariat: PM Makapan

4 4 No GOVERNMENT GAZETTE, 29 JANUARY 2015 The Commission considered the comments and inputs from the relevant stakeholders and took into account other factors that are within its mandate in finalizing its Annual Remuneration Recommendations for 2014/2015. In terms of Section 8 (3B) (a) the Chairperson of the Commission recused himself from the deliberations of Judges and Magistrates remuneration given his conflicted position. The Commission considered the following factors, namely: O Section 8(6) of the Commission Act The level of the Consumer Price Index (CPI) and its forecast Market salary increase during the past year Forecasted salary increase for the year ahead The economic and social environment The past recommendations together with the President's determinations The inputs from key stakeholders in terms of the mandatory consultation requirements 2.1 Section 8 (6) of the Commission Act In relation to Section 8 (6) (i) of the Commission Act, the Commission is of the view that the roles, status, duties, functions and responsibilities of the Public Office Bearers were considered during the last Major Review Report. Since the implementation of the Commission's Major Review in 2008 and subsequent recommendations, the Commission has received numerous requests from stakeholders to review Public Office Bearers' remuneration. Due to inadequate financial resources and other priorities, the Commission has not been able to deal with stakeholders' requests. The Commission has informed the stakeholders that it will in future advise them of its intentions regarding the review of all Public Office Bearers' remuneration, benefits and allowances. In the current financial year, the Commission is focusing on the review of the remuneration of local government Public Office Bearers as its major project. In light of the fact that the terms of majority of the current Commissioners end during the current year, the Commission is of the view that it is prudent to defer the decision on the requested review process for other Public Office Bearers to the incoming Commissioners who will be appointed during the year. 2.2 The level of the Consumer Price Index (CPI) and its forecast Inflation can be defined as the increase in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects erosion in the purchasing power of money a loss of real value in the internal medium of exchange and unit of account in the economy. The economics of inflation and remuneration increases are interrelated. High inflation demands increase in remuneration to maintain the current lifestyle at higher prices. As is commonly known, people expect higher remuneration increases with higher inflation. When remuneration is increased it further fuels the existing inflation by increasing the demand of commodities. Commissioners: Judge CJ Musi (Chairperson); Adv M Seib (Deputy Chairperson); Mr C Economou; Adv HFN Sephoti; Ms TN Mgoduso, Dr R Nienaber; Dr LM Mbabane and Mr AL Pheto Head of Secretariat: PM Makapan

5 STAATSKOERANT, 29 JANUARIE 2015 No The below Table indicates the annual average change in Consumer Price Index (CPI), Producer Price Inflation (PPI), Gross Domestic Product (GDP) and interest rate data from 2008 to 2013: YEAR CPI PPI GDP PRIME INTEREST RATE % 14.3% 3.43% 15.0% % 0.2% -1.48% 10.5% % 6.0% 2.98% 9.0% % 7.4% 3.05% 9.0% % 5.4% 3.30% 8.5% % 6.0% 2.10% 8.5% South African Reserve Bank (SARB) The Monetary Policy Committee (MPC) meeting of 29 January 2014, forecasted average inflation rate for 2014 to 6,3%, and 6,0% in 2015, with inflation expected to average 5,9% in the final quarter of 2014, Inflation was expected to breach the upper end of the target range in the second quarter of 2014, and to reach a peak of 6,6% in the final quarter of the year, before declining to 6,0% in the second quarter of The MPC meeting of 20 November 2014 again forecasted inflation to average 5,9% in the final quarter of 2014, and an average 6,1% for the year. Reuters Core inflation, which averaged 5,2% in 2013, is expected to average 5,8% in 2014, compared with 5,6% in the previous forecast, while the forecast for 2015 has increased from 5,3% to 5,9%, Financial analysts have the lowest forecast, which is reflected in the Reuters survey that indicates expectations of 5,6% and 5,5% in 2014 and 2015 respectively. BER The BER in its first quarter publication of 2014, reflect that the CPI inflation is forecast to peak at 6.3% year-on-year in second quarter of 2014 and average 6.1% in This is an upward revision of 0.4% points compared to September. For 2015, the forecast is 0.2% points higher at 5.7%. Andrew Levy Employment Publications The Wage Settlement quarterly report of December 2013 published by Andrew Levy Employment Publications indicates that the CPI moved to 5.4% in December and averaged 5.7% in The downward movement had a moderating effect on wage settlements, 39% of which fell within the 7% to 7.9% band in The Wage Settlement quarterly report of September 2014 indicated an average of 8% for wage settlements rates in the first nine months of the year. Commissioners: Judge 0 Musi (Chairperson); Adv M Sella (Deputy Chairperson); Mr C Economou; Adv HFN Sephoti; Ms TN Mgoduso, Dr R Nienaber; Dr LM Mbabane and Mr AL Pheto Head of Secretariat: PM Makapan

6 6 No GOVERNMENT GAZETTE, 29 JANUARY 2015 South Africa's big banks have indicated their inflation forecast as follows: First National Bank Nedbank Standard Bank 5.8% 5.9% Average 5.78% 2014 Forecast 5.7% 5.6% 6.2% 5.3% 5.5% 5.66% 2015 Forecast 5.5% 5.5% 5.8% 5.9% 2.3 Market salary increase during the past year Public Service Employees Remuneration In terms of section 3(5) (a) of the Public Service Act, 1994, as amended, read with the Public Service Regulations (Chapter 4, Part 4, Section B1), the Minister of Public Service and Administration determined/approved the cost-of-living adjustment (COLA) with effect 01 April 2014 as follows: Salary Levels 14 to 16 (Chief Director, Deputy Salary Level 13 (Director level) Director-General and Director-General levels) 5.7% 6.2% Employees on salary levels 1 to 12 received the cost-of-living adjustment based on the National Treasury's average projected CPI plus 1% which is 7.2% for the year 2014/15. Local Government Employees The South African Local Government Bargaining Council signed an agreement in 2012 for a multi-year (3 years) Salary and Wage Collective Agreement indicating, amongst others, a COLA increase in 2013/14 of CPI plus 1.25 %. 2.4 Forecast salary increase for the year ahead According to a HR quarterly report published in December 2013 by PWC it is anticipated that the market increases for 2014 would range as follows: Projected Increases (%) - Total Guaranteed Package Executives Management Key Specialists 6.2% 6.4% 6.4% Commissioners: Judge 0 Musi (Chairperson); Adv M Sello (Deputy Chairperson); Mr C Economou; Adv HFN Sephoti; Ms TN Mgoduso, Dr R Nienaber; Dr LM Mbabane and Mr AL Pheto Head of Secretariat: PM Makapan

7 STAATSKOERANT, 29 JANUARIE 2015 No The Economic and Social Environment In June 2013 Preparation of Expenditure Estimates for the 2014 Medium Term Expenditure Framework the Minister indicated that the total compensation of employees' budget baseline ceiling for will be in terms of the current wage bill agreement of CPI inflation plus 1 per cent. For 2015/16 and 2016/17 institutions should budget for a cost of living increase of CPI inflation, in addition to the pay progression and other benefits and allowances that are stated in the current wage bill agreement, and which are already provided for in institutional budget baseline. According to the Medium Term Budget Policy Statement of 23 October 2013, the settlements in the first half of 2013 raised wages by 7.9% on average, up from 7.6% in Real wage growth exceeded productivity growth, leading to a 6.7% increase in unit labour costs in the first quarter of 2013 relative to the same period in The Past Recommendations and the President's Determinations The following table summarises the past cost-of-living-adjustment recommendations made by the Commission and the President determinations for all public office bearers: Year Commission Recommendations President Determinations 2008 Major review & 11% Major review & 11% % 7% % 5% % 5% % 5.5% 2013 Sliding Scale (0% to 7%) 5% for all except the President 3. RECOMMENDATION The Commission is obliged by statutory enactment to make recommendations for salary adjustments of public office bearers. After taking into account all relevant factors mentioned here above together with the provisions of applicable legislation, the Commission is proposing a 5% adjustment for public office bearers earning more than R and 6% for public office bearers earning less than R with effect from 01 April Signed at pg...e.-- -r te4 on22/ January Commissioners: Judge CJ Musi (Chairperson); Adv M Sella (Deputy Chairperson); Mr C Economou; Adv HFN Sephoti; Ms TN Mgoduso, Dr R Nienaber; Dr LM Mbabane and Mr AL Pheto Head of Secretariat: PM Makapan

8 8 No GOVERNMENT GAZETTE, 29 JANUARY 2015 SCHEDULE -I REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 NATIONAL EXECUTIVE AND DEPUTY MINISTERS GRADE PAY LEVEL POSITION 01-Apr Apr-14 EA 1 President EB 1 Deputy President EC 1 Minister ED 1 Deputy Minister SCHEDULE 2 REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 MEMBERS OF PARLIAMENT GRADE PAY LEVEL POSITION 01-Apr Apr-14 PA 1 Speaker: National Assembly Chairperson: NCOP PB 1 Deputy Speaker: National Assembly Deputy Chairperson: NCOP House Chairperson PC 1 Chief Whip: Majority Party Chief Whip: NCOP Parliamentary Counsellor: President Parliamentary Counsellor: Deputy President Leader of Opposition Chairperson of a Committee PD 1 Deputy Chief Whip: Majority Party Chief Whip: Largest Minority Party Leader of a Minority Party Whip PE 1 Member: National Assembly Permanent Delegate: NCOP SCHEDULE 3 REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 PROVINCIAL EXECUTIVES AND MEMBERS OF LEGISLATURE GRADE PAY LEVEL POSITION 01-Apr Apr-14 LA 1 Premier LB 1 Member of Executive Council Speaker LC 1 Deputy Speaker Chief Whip: Majority Party Chairperson of Committees Leader of Opposition Chairperson of a Committee Deputy Chairperson of Committees Deputy Chief Whip: Majority Party Chief Whip: Largest Minority Party Leader of a Minority Party LD 1 Parliamentary Counsellor to a King Whip Member of Provincial Legislature

9 STAATSKOERANT, 29 JANUARIE 2015 No SCHEDULE 4 REMUNERATION LEVELS WITH EFFECT 01 JULY 2014 LOCAL GOVERNMENT GRADE PAY LEVEL POSITION 01-Apr July Apr-14 MA 1 Executive Mayor Mayor MB 1 Deputy Executive Mayor Speaker/Chairperson Deputy Mayor MC 2 Member of Executive Committee Member of Mayoral Committee Chairperson of a Sub-council Whip MD 1 Municipal Councillor SCHEDULE 5 REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 JUDGES GRADE PAY LEVEL POSITION 01-Apr Apr-14 JA 1 Chief Justice JB 1 Deputy Chief Justice President: Supreme Court of Appeal JC 1 Deputy President: Supreme Court of Appeal Judge: Constitutional Court Judge: Supreme Court of Appeal Judge President: High/Labour Court Deputy Judge President: High/Labour Court Judge: High/Labour Court SCHEDULE 6 REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 MAGISTRATES GRADE PAY LEVEL POSITION 01-Apr Apr-14 JD 1 Special Grade Chief Magistrate Regional Court President JE 1 Regional Magistrate Chief Magistrate JF 1 Senior Magistrate JG 1 Magistrate

10 10 No GOVERNMENT GAZETTE, 29 JANUARY 2015 SCHEDULE 7 REMUNERATION LEVELS WITH EFFECT 01 APRIL 2014 TRADITIONAL LEADERS GRADE LEVEL FULL TIME POSITIONS 01-Apr-13 TA 1 King TB 1 Chairperson: NHTL , 2 Full time Chairperson: PHTL Y1 3 Deputy Chairperson: NHTL Full time Deputy Chairperson: PHTL TC 1 Full time Member: NHTL Full time Member: PHTL TD Senior Traditional Leader TE 1 Headmen / Headwomen PART TIME POSITIONS* 1 APRIL 2013 (Per Day) 01 APRIL 2014 (Per Day) Part time Member: NHTL Part time Chairperson: PHTL Part time Deputy Chairperson: PHTL Part time Member: PHTL 895 * In addition to sitting allowances, part time members are entitled to their salaries as Traditional Leaders, as well as subsistence costs (reasonable and actual expenses) and transport costs (Department of Transport tariffs for the use of privately owned vehicles), for their attendance of official meetings, seminars, workshops and conferences of the respective Houses)

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16 16 No GOVERNMENT GAZETTE, 29 JANUARY 2015 NOTICE CHANGE OF TELEPHONE NUMBERS: GOVERNMENT PRINTING WORKS As the mandated government security printer, providing world class security products and services, Government Printing Works has adopted some of the highly innovative technologies to best serve its customers and stakeholders. In line with this task, Government Printing Works has implemented a new telephony system to ensure most effective communication and accessibility. As a result of this development, our telephone numbers will change with effect from 3 February 2014, starting with the Pretoria offices. The new numbers are as follows: Switchboard: Advertising: Publications Enquiries: Debtors: Subscription: SCM: Debtors Creditors: / /6206/6207/6208/6209/6210/6211/ / /6058 GeneralEnquiries@gpw.gov.za /6065 BookShop@gpw.gov.za /6056/6064 PublicationsDebtors@gpw.gov.za /6060/ /6373/ / /6274 Please consult our website at for more contact details. The numbers for our provincial offices in Polokwane, East London and Mmabatho will not change at this stage. Printed by and obtainable from the Government Printer, Bosman Street, Private Bag X85, Pretoria, 0001 Publications: Tel: (012) , , Advertisements: Tel: (012) , , , , Subscriptions: Tel: (012) , , Gedruk deur en verkrygbaar by die Staatsdrukker, Bosmanstraat, Privaatsak X85, Pretoria, 0001 Publikasies: Tel: (012) , , Advertensies: Tel: (012) , , , , Subskripsies: Tel: (012) , ,